I was listening to Jim Rogers tonite on Bloomberg TV and he is still bullish on commodities for another 10 years or so. He does not think we are anywhere near a commodities bubble and this is just a correction. Some of his supporting points were :
1. no new major oil find in last 30 years
2. 7000 stock mutual funds vs <10 commodities funds
3. Hedge funds control a very small %total commodities market (Approx. 200B vs 40T -seperate commentator in the same show).
A third commentator said that if world GDP is growing at 3-4% for next 10 years, commodities will be ok or up. 2% growth will be a problem. I think next year's prediction for world GDP is 5%.
I own few PM stocks(ouch!) and 2 energy stocks (both energy stocks had recent insider buys).
My question is : if hedge funds are so small, who is doing the selling to bring down the commodities prices ? HB&B as Bill suspects ?

Some of these commodity markets are much thinner than you realize, especially when you factor in leverage at 6-to-1 or 8-to-1.

I read that Amaranth's rogue natgas trader was responsible for something like 20-25% of the volume on some of the out-month contracts he was trading. So one trader was essentially trying to corner the market in a series of natgas futes.

I'm no expert in the natgas fute field, but my guess is that when he got into trouble, the rest of the market caught wind and drove him into the ground.

I would imagine few, whether in finance or not, realize just how illiquid and manipulated these commode derivatives are.

Currencies and bonds are much bigger markets where a single trader or a handful of hedge funds or Humungous Banks and Brokers can't bring the house down. But commodes are a different story, and that includes the precious metals as well.